NEXUS December 2017 online version

there may be value in referring to this process as problem
solving, brainstorming or just discussion. Imagine calling a
business associate and telling them you would like to schedule a
meeting to “negotiate” a deal. What assumptions do you think
they are likely to make?
TRADITIONAL POSITIONAL BARGAINING
A position is defined as: “The stance that both parties take
respecting a particular issue or point of discussion.” Negotiating
based on positions creates sub-optimal outcomes; this is a
concept that is worth exploring in some detail.
One of the deeply-embedded patterns we often fall prey to
during our negotiations is the practice known as Traditional
Positional Bargaining. This negotiation style subscribes to
the practice of entering the negotiation by opening with an
extreme position and operating under the assumption that our
counterpart will do the same.
For example, we enter the negotiation knowing that we would
be willing to pay $10 for a particular item. Assuming $10 is the
price we are willing to pay, we often build in a small cushion and
our opening offer is $5. We take a position that is not reflective
of how much we value the item, but we know we must start
low as we expect the other side to start at $20. We have the
expectation that they will also build in some negotiating room
and, accordingly, they artificially inflate their price to allow for
this carefully choreographed dance.
"Instead of focusing on the positions
of both parties, there may be value in
looking at the interests of both sides."
One side knows the other side is going to start high, so they start
low and the games begin. One side expresses their extreme
position and the other side expresses a contrary extreme
position. One side makes a small concession and the other side
reciprocates. One side makes an additional concession and the
other side reciprocates. This process goes back and forth until
both sides arrive at a price they are satisfied with. This is referred
to as Positional Bargaining or in some circles as Distributive
Bargaining. Sound familiar?
There are many shortcomings associated with engagement
of this kind of positional bargaining process, yet we seem
inclined to continue with this kind of strategy. Clearly, it sets up
an oppositional relationship between the negotiating parties.
Engagement of positional bargaining also incents people to
artificially inflate their positions in order to accommodate the
negotiation.
Basically, this process is based on lies, as neither party actually
believes their opening position is fair. The additional downfall of
this process is that it takes far more time to reach an outcome.
Try this the next time you go to purchase groceries at your local
supermarket; you will be there a lot longer than normal.
It is interesting to note that these kinds of negotiations do
not just take place at flea markets; rather they take place
during many negotiations here in our culture. If you have ever
purchased a house or a car, there is a strong likelihood that you
engaged in this process.
INTEREST-BASED NEGOTIATION
If Traditional Positional Bargaining is a sub-optimal way in which
we negotiate outcomes, could there be a better way of getting
to a solution that meets both party’s needs? Absolutely. Instead
of focusing on the positions of both parties, there may instead
be value in looking at the interests of both sides.
An interest is defined as: “The reason or motivation a person has
or holds that supports their position or drives their behaviors.”
In essence, interests are defined as “What is truly important
to both sides,” and include concerns, hopes, expectations,
assumptions, perceptions, beliefs, fears, values and needs.
Consider the example of a prospective tenant looking to
move into an apartment and engaged in a negotiation with
the potential landlord. The tenant insists on moving into a
ground-level apartment and the landlord advises there are no
ground-level apartments available. The tenant suggests the
landlord evict one of the existing tenants from the ground
floor to create a vacancy. The landlord flatly refuses, advising
it would compromise their integrity to evict a tenant. The
tenant escalates and departs. This is an example of a positional
negotiation, with both sides focusing on
the “what.”
Shift now to an interest-based negotiation
between the same two participants. The
tenant insists on moving to a ground-level
apartment and the landlord advises there
are none available. The landlord then asks
“why” that is an important consideration,
thereby shifting from a positional negotiation toward an
interest-based discussion.
The prospective tenant advises that they are deathly afraid
of fire and don’t want to live any higher than the ground floor
for ease of escape in the event of a fire. The fact remains there
are no ground-level apartments available, however knowing
the underlying interest of the tenant and the motivation for
insisting on a ground-level apartment allows the landlord to
come up with other options that meet both party’s interests.
One such option might be to rent an apartment on another floor
to the tenant, with close proximity to the fire escape.
The point to be made is this: When we remain positional, our
potential outcomes become limited. When we focus on the
“what,” we miss the “why.” Interests (the “why”) are powerful
motivators behind our behaviors and seeking to understand
the interest behind the position is an outstanding way to create
value.
OPTIONS
To be an effective negotiator, it is important that one
understands the difference between options and alternatives.
NEXUS – december 2017
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